The defendants moved for a stay of a civil action on the basis of an arbitration clause contained in a later energy supply agreement, or alternatively sought an extension of time to deliver a statement of defence.
The plaintiff alleged that the agreements were void and sought damages for negligent or fraudulent misrepresentation relating to the formation of the contracts, asserting that the agreements were not authorized and were based on misrepresentations regarding energy savings.
The court held that the arbitration clause applied only to disputes “under” the agreement and did not encompass a challenge to the existence or validity of the agreement itself.
As the dispute concerned the validity of the agreements rather than performance under them, it fell outside the scope of the arbitration clause.
The motion to stay the action was therefore dismissed, though the defendants were granted additional time to deliver their statements of defence.
